An Asset Was Acquired on August 1, 2018, for $22,000

question 177

Multiple Choice

An asset was acquired on August 1, 2018, for $22,000 with an estimated 5-year life and $2,000 residual value. The company uses straight-line depreciation. Calculate the gain or loss if the asset was sold on April 30, 2020, for $13,000. Partial-year depreciation is calculated based on the number of months the asset is in service.

• A) $3,000 gain.
• B) $2,000 loss.
• C) $6,000 gain.
• D) $4,000 loss.

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Definitions:

Locus Of Control

A person’s belief concerning the degree to which internal or external forces control his or her future.

High Need To Achieve

A psychological trait characterized by a strong desire to accomplish tasks and meet high standards of performance.

Entrepreneurial Personality

A set of personality traits or characteristics that are commonly found in successful entrepreneurs, such as risk-taking, creativity, and resilience.

Need To Achieve

The personal quality, linked to entrepreneurship, of being motivated to excel and choose situations in which success is likely.